CCTS Newsletter | December 4, 2017

With the number of legislative days before the end of the year approaching single digits and a long list of critical items remaining, Republican lawmakers in Congress put much of their energy behind advancing the Tax Cuts and Jobs Act. The House of Representatives passed its version of the bill in November and the Senate passed a differing version of the bill in early December. Both bills are a comprehensive restructuring of America’s tax code, with changes to tax brackets and corporate tax rates along with a number of detail-oriented changes to deductions and credits.

There are a handful of tax-related healthcare provisions that will need to be addressed as the House and Senate work to iron out differences and negotiate a final tax bill. Most notably, the Senate bill includes an elimination of the Affordable Care Act’s individual mandate to purchase insurance (which is likely to be popular with the majority in the House). Additional modifications to health coverage and access (including patient protections) have been tabled though to accommodate the concerns of moderate Senators. The House bill eliminates the Orphan Drug Tax Credit and the deduction for medical expenses. Patient and professional stakeholders have reached out to legislators to register their objections to these provisions, but it remains to be seen how they will be treated in a final tax package.

The president has committed Congress to a time-line that sees passage of the final tax bill just ahead of the end of the year congressional recess (which is scheduled to occur just before Christmas Eve). It is expected that the focus on the tax plan along with the continued absence of an overarching budget deal that sets top-line numbers for agency spending will delay additional action on fiscal year (FY) 2018 appropriations. In this regard, the House of Representatives has prepared a Continuing Resolution (CR) that we will keep federal programs funded at their FY 2017 levels until December 22nd. If Congress fails to complete their work on appropriations before adjourning, an additional CR will be needed that will carry FY 2017 funding into January of next year.

Currently, there is a $1.1 - $2 billion discretionary funding increase pending for the National Institutes of Health through the FY 2018 appropriations measures (with corresponding increases for various Institutes, Centers, and programs). Failure to take meaningful action to finalize the FY 2018 appropriations bills may result in a year-long CR that foregoes the proposed increase and instead maintains FY 2017 levels of funding.